LONDON, Feb 19 (APM) - The price NICE agrees to pay for new medicines for the National Health Service in England is too high, causing more harm than good overall, according to an academic report.
Research by health economists at the University of York has estimated the effects of changes in NHS expenditure on the health of all NHS patients.
The researchers said in a report published on Wednesday the special cancer drugs fund is particularly poor value, diverting money from other patient services, and argue NICE has set its price threshold for drugs too high.
But NICE said on Thursday lowering prices could force it to refuse newer therapies on the NHS. Its chief executive Andrew Dillon, speaking on the BBC radio's Today programme on Thursday, said it was all about striking a balance.
"You can't not allow medicines to advance and not give access to patients to these newer treatments that can make a difference where there is no alternative. You have got to strike a balance. We think we have got it right."
The health service has to balance the costs of new treatments alongside investments made in more routine care. To do this the National Institute for Health and Care Excellence (NICE) uses a measure called quality-adjusted life years (QALY). A similar approach is used in Wales and Northern Ireland but Scotland has a different system for assessing drugs, used by the Scottish Medicines Consortium.
The formula looks at the cost of using a drug for a year and weighs it against how much someone's life can be extended and improved.
At current limits, if a medicine costs more than 20,000 to 30,000 pounds (27,000 euros to 40,500 euros) per QALY, it would not generally be recommended as cost-effective. But the York University researchers say the level should be closer to 13,000 pounds (17,600 euros) to provide the most benefit across the NHS.
Report's proposed prices 'unprecedented' - NICE
They argue that when NICE recommends the purchasing of drugs at higher prices, funds are diverted from other services and could lead to increased deaths from cancer, heart and lung and gut diseases across the NHS.
However, Dillon suggested the figures proposed in the report are unrealistic. "Unless you think drug companies are going to bring their prices down to levels that are completely unprecedented in this country or anywhere else in the world, then you can't operate it at a level professor Claxton (report's co-author) is suggesting."
A separate pot of money, the cancer drugs fund, allows for more expensive life-extending drugs. The fund was set up by the coalition government in 2011 to pay for drugs that have been rejected on cost-effectiveness grounds by NICE.
But the report was equally damning of the cancer drugs fund. "It also indicates the scale of the harm that has been done to other NHS patients of devoting 280 million pounds (378.2 million euros) of NHS resources to the Cancer Drugs Fund in 2014/15 (a loss of 21,645 QALYs)."
Questioned on this by the BBC, Dillon said the cancer drugs fund shows what happens where no limits are in place and the need to strike a balance.
"It is an example of what happens when you do not have a threshold to allow you to judge value for money and pretty much anything goes and indeed, has gone in terms of pricing. You have got to strike a balance.
"You can't have a system that takes no account of prices. You can't have a system that assumes an unrealistic position about how successful you are going to be in negotiating prices."
He said drug companies need to be pushed to "give the best price they possibly can. There is more we can do and NICE is part of that process."
The report said more harm is being done to other NHS patients when NICE approves more costly drugs. For example, the approval of a new drug that costs the NHS an additional 10 million pounds (13.5 million euros) each year would offer benefits of 333 QALYs (at the current NICE threshold).
"This research shows it would also lead to the loss of 773 QALYs for other NHS patients with increased mortality in cancer, circulatory, respiratory or gastrointestinal diseases and reduced quality of life in neurological diseases and mental health (a net loss of 440 QALY for every 10 million pounds of additional NHS costs)."
Political will to bring prices down
Co-author of the University of York report professor Karl Claxton said: "Our research makes the unidentified NHS patients who bear the real costs a little more real. The increasing pressure to approve new drugs more quickly at prices that are too high will only increase the harm done to NHS patients overall."
He told the BBC: "Can we negotiate on price? We think we can, but only if there is a political will to say no to prices that are unaffordable to the NHS."
Report 'missing fundamental point' - ABPI
Paul Catchpole, director of value and access at the UK pharma trade body the ABPI, said the research “is likely to be of some academic interest but should not be used as a basis for policy or decision making,” since it "misses a fundamental point about how NHS investment decisions are made".
He said: "Very few healthcare decisions are made using the QALY alone and in reality a wide range of other factors are used for decision making. A study commissioned by the ABPI demonstrated that investment decisions made by local NHS organisations generally do not take into account the QALY.
"If a threshold of 13,000 pounds were applied to decisions about all healthcare interventions then many vital services would cease to be considered viable including A&E, palliative care for dying patients and maternity services for newborns and their mothers."
He underlined that life-enhancing and life-saving medicines "cost money to develop and produce," but made clear, however, that industry was "acutely aware of the cost pressures that the NHS operates under".
"That is why, via the pharmaceutical pricing agreement (PPRS), the industry is underwriting all medicines expenditure by the NHS over agreed levels, providing a unique opportunity to increase the availability and use of the best new and most innovative medicines, at minimal additional cost."
He pointed out last year pharma paid the Department of Health 229 million pounds (310 million euros) under this scheme and anticipates paying approximately 800 million pounds (1.08 billion euros) in 2015. Over the total five-year life of the scheme, the ABPI forecasts paybacks in the region of 4 billion pounds (5.4 billion euros), he said.
Agreeing with the report's criticism of the cancer drugs fund, Catchpole described it as "nothing more than a sticking plaster to fix a broken process".
He concluded: "... we firmly believe that NICE and NHS England need to change the way that medicines are evaluated and funded in order to create a system that is more responsive to provide timely access for all NHS patients to the new medicines that are being developed by the pharmaceutical industry."
The University of York research is funded by the National Institute of Health Research and Medical Research Council.